If you want to profit from the world hottest economy, then you need to know how to invest in Chinese real estate. In fact, to the surprise of many people, the world's fastest growing economy is not powered by its export driven company, but rather the core to the growth in China is its real estate. Ever since China granted its citizen limited ownership to their property, the Chinese real estate market has grown at an astounding rate of 22% a year. Its future will be fueled by a mix of domestic demand and international investments. Make no mistake; investing in Chinese real estate market is the gold rush of the century.
- Understand Chinese real estate market. You do not want to invest in something that you do not understand. The Chinese real estate market is the fuel of its industrial engine; even to a certain extent, the legitimacy of the communist government. You can bet your bottom dollar that if the Chinese government wants double digit GDP growth, they will prop the real estate market.
- Invest in Chinese real estate directly. This method is only applicable to some people. You must stay in China, work or study, for more than one year. Then you can purchase property for personal use. Obviously, this does not work for everyone, especially the average investor.
- Investing in Chinese construction companies. The real estate boom directly benefits a large number of construction companies and contractors. There are a lot of them on the Chinese stock exchange, and you need to figure out which one you want to invest in.
- Invest with mutual funds and exchanged-traded funds. For example, the Claymore/AlphaShares China Real Estate ETF is an ETF that tracks the performance of the AlphaShares China Real Estate Index. If you are an average investor who does not want to go through the red tape of international investing, then this is the best method for you.
- Make sure that you fully understand the meaning of limited private ownership in China, and it is worded differently than those of many western countries.